What Level of Income Protection Do I Need?

Income protection insurance is designed to give you peace of mind if illness or injury prevents you from working. But knowing how much cover you actually need can feel confusing. Let’s break it down simply so you can feel confident making the right choice for your circumstances — whether you're supporting a family, living alone, or planning ahead for life’s unexpected events.

Why Income Protection Matters

If you're working full-time or self-employed, and responsible for covering regular expenses like a mortgage or rent, your income is probably your most valuable asset. Without your income, paying bills, managing childcare, or maintaining your lifestyle could quickly become difficult. Income protection can be a sensible option at many life stages, especially if you have ongoing financial responsibilities and limited fallback options.

Income protection insurance steps in to pay you a regular income – usually monthly – if you can’t work due to accident or sickness. It can keep your household financially afloat until you recover or reach retirement.

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Step-by-Step: How to Work Out the Right Level of Cover

1. Start With Your Monthly Outgoings

Think about what you need to cover each month. Start with essentials:

• Mortgage or rent
• Utility bills
• Council tax
• Food and groceries
• Travel costs
• Childcare or school fees
• Loan or credit card repayments

Add these up. This is your essential monthly income need – the minimum you’ll want your income protection policy to cover.

Top Tip: Income protection typically covers around 50–65% of your gross monthly income.

2. Consider Your Employer’s Sick Pay

How long would you continue receiving full or partial pay if you were off sick?

If your employer offers:

Full sick pay for a few months, you may want your policy to start after that ends (this is called the deferred period).

Statutory Sick Pay (SSP) only – £118.75/week (2025/2026)* for up to 28 weeks – your income will drop quickly.

Knowing your sick pay rights helps you decide when your policy should start paying out – and that can impact the monthly cost of your cover.

3. Factor in Any Savings or Other Income

Do you have savings you could rely on short-term? Or a partner’s income that would help? If you have a financial cushion, you might be able to reduce your cover amount or extend your deferred period – which can lower your premiums.

If you rely heavily on your own income, you may want a higher level of cover with a shorter waiting time before it kicks in.

4. Choose How Long You Want Payments to Last

There are usually two options:

Short-term policies (e.g. 1 or 2 years of pay outs per claim): cheaper, but limited.

Full-term policies (pay until you return to work, retire or the policy ends): more comprehensive, but pricier.

👉 Think about your job type, health risks and how long a recovery could take if you were seriously unwell.

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Examples to Help You Decide

Let’s take a look at how this works in practice:

Mark, 42, self-employed electrician

• Monthly income: £3,000
• Outgoings: £1,900
• Wants cover for: 65% of income (£1,950/month)
• No sick pay, minimal savings
• Wants full-term cover with a 4-week deferred period

Jo, 38, office manager

• Monthly income: £2,800
• Outgoings: £1,600
• Employer offers 3 months full sick pay
• Wants short-term cover (12 months), with a 13-week deferred period

Balancing Affordability and Protection

You’ll want to strike a balance between:

• Monthly premium costs
• How soon the policy pays out (deferred period)
• How long it pays out for (short-term vs long-term)
• How much it pays you (monthly benefit)

If the premiums feel high, consider:

• Extending the deferred period
• Reducing the pay out period
• Covering a smaller portion of your income (just the essentials)

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Still Not Sure? We Can Help

At Best Value Cover, we connect UK workers with friendly, FCA-regulated advisors who can offer tailored guidance on income protection. Whether you're employed or self-employed, speaking to an expert is the best way to navigate this complex market. Online quote comparisons can be a useful starting point, but they often miss the crucial details that determine whether a policy truly fits your needs. An advisor can help you understand the fine print, explain your options, and recommend cover that suits both your income and your lifestyle.

Final Thought

There’s no one-size-fits-all answer to “what level of income protection do I need?” – but by looking closely at your monthly costs, existing financial safety nets, and how long you could manage without income, you can make a smart, confident decision.

Protecting your income means protecting your future.

Take the next step today.

Find your income protection cover